President’s No. 1 Economist Adds Power to the Post : White House: With his tennis game and grasp of analysis, Michael J. Boskin has become one of the most influential senior policy-makers in the Bush Administration.

When Soviet leaders came to Washington last month to seek U.S. aid, they spent nearly two days pleading their case with the “Boskin Group,” an informal gathering of senior Bush Administration officials chaired by Bush’s chief economic adviser, Michael J. Boskin.

The Russians sought out Boskin because they had heard the same things about him that others in Washington had learned long ago: Boskin, chairman of the President’s Council of Economic Advisers, is much more than just the President’s official economist.

In fact, in 2 1/2 years at the White House, the 45-year-old Boskin has become one of the most influential senior policy-makers in the Administration. Along with White House Chief of Staff John H. Sununu and Budget Director Richard G. Darman, he is a key member of a powerful “troika” that determines the direction of policies ranging from global warming to global trade, from Soviet aid to capital gains.

Boskin’s emergence as a top-level player in the White House marks a dramatic shift in the political standing of the council, which was virtually ignored by policy-makers in the Reagan Administration.

During the Reagan years, the pronouncements of the President’s chief economic advisers were often ripped to shreds inside the White House, largely because they told Reagan what he didn’t want to hear: that Reaganomics was likely to result in huge budget deficits.

Martin Feldstein, the second of Reagan’s three chief economic advisers--and by far the most respected economist to serve Reagan--became so insistent in his internal criticism of Reagan tax and budget polices that he was ousted and replaced with the more agreeable Beryl W. Sprinkel. By the end of Reagan’s second term, the White House was reportedly close to abolishing the council altogether.

But Boskin has resurrected the CEA on the strength of his close personal relationship with his regular tennis partner, George Bush. After serving as Bush’s economic adviser during the 1988 presidential campaign, Boskin moved easily into the same job at the White House.

“We first met about 10 years ago, and then he asked me to come by, starting in 1987, to talk about the economy,” Boskin says of his friendship with Bush. “He was still developing his themes (for the next year’s campaign) and so it was an opportunity to help flesh out his thinking,” says Boskin of his early meetings with Bush before the 1988 campaign got under way. “And he and I hit it off.”

Now, to a greater degree than any of his predecessors--with the possible exception of Alan Greenspan, who had a similar relationship as CEA chairman under President Gerald R. Ford--Boskin has the President’s ear. Greenspan now is chairman of the Federal Reserve Board.

Boskin insists that his job has been made much easier by the fact that Bush, an economics major at Yale, seems genuinely interested in economic policy. Boskin’s staffers say that memos analyzing economic conditions are often returned with detailed remarks by Bush written in the margins.

“That job very much depends on your relationship with the President, and he certainly seems to enjoy a very good relationship” with Bush, observes Michael Darby, an undersecretary of the Commerce Department and a close friend of Boskin. “So he has taken a lead role in economic policy-making.”

Jack Valenti, the movie industry’s chief lobbyist in Washington, found out about Boskin’s influence the hard way earlier this year. In one paragraph buried deep in the CEA’s annual report, Boskin called for abolishing a regulation that protects movie producers by prohibiting the television networks from gaining ownership of the programs they broadcast. Boskin’s endorsement of the repeal of the regulation marked a victory for the networks, since it was the first time that the White House had weighed in on the issue. But when Valenti fought back and his lobbyists publicly claimed that they had reversed the White House position, Sununu, aware of Boskin’s close ties to the President, angrily slapped down Valenti’s efforts to undermine the economic adviser.

Boskin has built close ties to Bush largely because he shares his pragmatic approach to government policy-making; while a professor at Stanford, he became known as a critic of Reagan’s willingness to mount huge budget deficits.

“I would not regard him as an ideologue at all,” notes Steve Landefeld, Boskin’s former chief of staff at the economic council. “He has some deep-rooted conservative feelings, but there aren’t many knee-jerk reactions in him.”

So far, Boskin has not made his name in Washington for performing the traditional functions of his job--analyzing the U.S. economy and recommending cures for the recession. Since the start of the slump last summer, the Administration has expressed no interest in mounting an anti-recessionary program, especially after last fall’s budget agreement virtually eliminated any chance for broad new spending programs.

Boskin, whose academic specialty was analyzing the economic costs of federal spending and budgetary programs, personally opposed any such tax or budget plans as well. He has argued that even if they were enacted immediately, they wouldn’t have an impact until long after the end of the recession.

But Boskin’s opposition to old-fashioned economic pump-priming by the federal government also reflects a broader rejection of such policies by the economics profession today.

“Twenty years ago, there would have been all kinds of plans coming out,” observes Herbert Stein, who was President Richard Nixon’s chief economic adviser. “But we in the economics profession have learned something about our limitations, and the CEA is no longer dominated by the idea of developing job-creating programs.”

Instead, Boskin’s main role on national economic issues now is to act as the Administration’s key liaison with Fed chief Greenspan, who considers Boskin one of the only White House policy-makers with whom he can discuss technical economic matters. So, while Treasury Secretary Nicholas F. Brady has assumed the more public, political role of bashing the Fed for not lowering interest rates fast enough, Boskin has taken on the behind-the-scenes task of coordinating policies with Greenspan, who has become another regular on Boskin’s tennis circuit.

But since there is no grand White House strategy to jump-start the economy, Boskin has concentrated instead on assuming the role of White House go-between on detailed legislative and policy issues that have some economic or budgetary connection. Virtually any meaningful policy decision has something to do with money, so Boskin, as has budget director Darman, has gained broad latitude to get involved in disputes throughout the government.

And since everyone else in the Administration knows that the President listens to Boskin, they listen to him too.

“He is the first CEA chairman to ever sit down at the negotiating table to actually work out the language of legislation,” an Administration official notes.

When Boskin does get involved, he tends to use his grasp of economic analysis as a lever in negotiations, usually in order to oppose measures that smack of industrial policy or look like taxpayer subsidies.

Early in the Administration, Boskin’s willingness to dive into such policy fights seemed to rub others the wrong way. Commerce Secretary Robert A. Mosbacher, for instance, was irked after Boskin led the fight to kill federal support for an American effort to develop high-definition television systems.

Later, Boskin’s intervention in the interagency negotiations over the Clean Air Act led to friction with Environmental Protection Agency chief William K. Reilly. More recently, Boskin slammed down attempts by White House science adviser D. Allan Bromley to revive government funding for certain types of industrial subsidies.

But unlike the abrasive Sununu and Darman, Boskin has gone out of his way to try to mend fences. He and his wife Chris, a magazine industry executive who commutes to work from Washington to New York, have made a point of socializing with the Mosbachers and Reillys.

An ambitious, workaholic professor from Stanford University, Boskin has long been involved in Republican politics, both in California and Washington, and began cultivating his relationships with Bush and other leading Republicans long before he came to the White House.

Born in New York City, Boskin moved with his family to Los Angeles as a child, and graduated from Hamilton High School before attending UC Berkeley--where he largely avoided the anti-war demonstrations that were then gripping the campus. After graduating in 1967, he stayed on at Berkeley for a Ph.D., and in 1971 moved to the economics faculty at Stanford.

At Stanford, his interest in fiscal and budgetary policy issues quickly led him into a dual role of “political economist,” and he soon began cultivating relationships with state and national political leaders.

“He wants to be a scholar, but he also wants to see his scholarly opinions affect policy,” observes Kenneth Arrow, a Nobel Prize-winning economist on the faculty at Stanford.

Boskin’s first contacts with Washington policy-makers came in the mid-1970s, when he became an informal adviser to the Democratic-controlled House Ways and Means Committee, which controls tax legislation.

But soon he gravitated to the Republican Party. After working to help prep Ronald Reagan for his debates with incumbent President Jimmy Carter in 1980, Boskin moved on to become an informal adviser on economic issues to Pete Wilson in his successful Senate and gubernatorial races, and also worked for former Rep. Ed Zschau (D-Calif.) in his failed attempt to oust Alan Cranston from the Senate.

Today, Boskin openly loves the use of power, but denies he is interested in any bigger job within the Administration. He has no plans to leave the CEA, but when he does, he says, it probably will be to leave government, perhaps to go back to Stanford. He still has a home in Palo Alto, and his wife’s weekly commute from Washington to New York is apparently wearing on both of them.

“This is the only government job I want on this sojourn,” Boskin says. “But I wouldn’t rule out coming back a second time.”

Bio: Michael J. Boskin

Chairman, President’s Council of Economic Advisers.

Age: 45

Born: New York, N.Y.

Education: Studied economics at the University of California at Berkeley, receiving a B.A. in 1967, a M.A. in 1968, and a Ph.D. in 1971.

Family: Married. No children.

Resume: Professor of economic at Stanford University since 1971 (on leave now). Also was West Coast director of the National Bureau of Economic Research. Was George Bush’s chief economic adviser during the 1988 presidential campaign.

Business philosophy: Pragmatic conservative.

Quote: Described the recession as “a meaningful downturn.”